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Steven H. Appelbaum
John Molson School of Business, Concordia University, Montreal, Canada

Michel Roy
St-Laurent, Canada, and

Terry Gilliland
Locweld Inc., Montreal, Canada
Abstract
Purpose The purpose of this article is to provide a more complete perspective regarding the best
practices for performance appraisals of distant employees in global organizations.
Design/methodology/approach A range of published works (1998-2009) on multinational
corporations and performance appraisals was reviewed. The literature was used to determine human
resource challenges associated with globalization as well as the types of performance appraisals, common
pitfalls and elements for improvement of appraisal systems. Concepts were then combined to determine
the best practices for performance appraisal in a global setting. Finally, a small questionnaire consisting
of six questions was constructed and sent to managers in two companies in the health care industry
meeting the criteria of having distant employees. The questions were open-ended in order to allow for a
variety of responses enabling the researchers to view trends and make comparisons with the literature.
Findings Adequate training must be provided to both the appraiser and the appraisee in order to
avoid the many rating errors that are common in performance appraisal. Training should include
cultural, legal and customer differences by country providing managers with the tools to improve on
the process. Managers must also be given the opportunity to build the required relationship with these
employees.
Research limitations/implications A questionnaire was sent to several key managers in two
complex pharmaceutical firms meeting the criteria with responses received. Further empirical research
on the best practices of performance appraisal for distant employees in global organizations should be
pursued.
Practical implications This article provides a source of information on what practices are followed
in order to support the performance appraisal of distant employees in different parts of the world.
Originality/value There is limited literature dealing with distant employee performance
appraisal in global organizations and this article attempts to fill this gap.
Keywords Best practice, Performance appraisal, Globalization, Multinational companies,
Workplace training
Paper type General review

Management Decision
Vol. 49 No. 4, 2011
pp. 570-585
q Emerald Group Publishing Limited
0025-1747
DOI 10.1108/00251741111126495

Introduction
Globalization has become the mainstream for many industries and with it comes the
difficulties associated with social, political, environmental and cultural consequences.
The purpose of this article is to help identify, through a review of literature, the best
practices in performance appraisals within a globalized or multi-national corporation
(MNC). In general, performance appraisals in MNCs are not unlike performance

appraisals in any other organization. The area where the authors have chosen to focus,
however, is on upper management levels where it is not uncommon for a manager to
have employees scattered throughout the world. This distant relationship adds other
challenges for both the appraiser and the appraisee. These challenges may in some
cases be similar to those experienced by matrix organizations where an employee does
not report to his/her direct superior on a day to day basis, but rather to the business
unit where they are located and supplying their services.
The article will be broken into five sections. The first section will look at some of the
reasons for globalization of organizations, the strategies and structures needed to
operate on a global basis, and some of the challenges faced by Human Resources (HR)
in a globalized environment. The next section will look at performance appraisals and
will highlight the different methods currently in use, some of the common pitfalls,
positive and negative outcomes and, finally, elements that can be implemented in order
to improve on current practices. The third section will discuss performance appraisals
in a global setting and what systems prove to be most effective and which do not. This
will be accomplished through discussion of the challenges, trust and relationship
requirements, cultural differences and the types of appraisal systems best suited for
this environment. Next, the researchers will compare the results from the review of
literature to two companies in the health care industry, MDS Pharma Services
(Contract Research Organization) and Pfizer (Biopharmaceutical). In order to make the
comparison, a small questionnaire consisting of six questions was constructed and sent
to managers meeting the criteria of having distant employees. The questions were
open ended in order to allow for a variety of responses enabling the researchers to view
trends and make comparisons to literature. Finally, the authors will offer
recommendations for performance appraisals in the global environment.
Trends and reasons for globalization structures and strategies
The availability of foreign products and services in many countries of the world has
dramatically increased since the 1990s and it is not uncommon to see stores such as a
Carrefour in competition with superstores such as Wal-Mart (Hammond and Grosse,
2003). An explanation for this might be found in the definition of globalization, as cited
by Hammond and Grosse (2003). It is the homogenization of peoples tastes and
demand patterns around the world, due to increased access to international
communication of information about products and services as well as increased access
to transportation of products and people across borders. However, with expansion
comes the difficulty of employing people in more than one country, and the need for a
structure-strategy on how the operations are to function in this foreign environment.
When organizations globalize operations, they are faced with the question of how to
integrate the new operation with the existing one. One concern is the relationship that
will be maintained between the corporate center and its foreign-based subsidiaries
(Kamoche, 1996). It has been stated that a central issue for management of MNCs is the
extent to which the operations will adapt to the foreign hosts environment versus
maintaining parent company practices (Prahalad and Doz, 1987; Rosenzweig and
Singh, 1991). One obvious reason for this is when organizations find themselves
operating in foreign countries, the subsidiaries will face pressures to both adapt locally
and integrate globally (Sauers et al., 2009). This conflict of goals and practices leads to
MNCs having to adopt one of two strategies; multidomestic or global orientation
(Porter, 1990; Roth et al., 1991).

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According to De Wit and Meyer (1998), with the similarities in international

demand, organizations can reap the benefits of product standardization on a global
scale. With product standardization, the international integration is facilitated through
the pursuit of further economies. The greater the standardization, the greater the
economies of scale that can be had by the firm which means the organizations pursuit
will likely be towards global integration as opposed to multidomestic.
However, the firm must meet the needs of its customers and in a foreign country these
needs may differ from what is considered standard. Furthermore, globalization is seen
by some as a threat to national identity and a loss of national sovereignty (Hammond
and Grosse, 2003). In Latin America for example, the benefits of globalization are heavily
debated. Those having benefitted little, claim that the appearance of it being the solution
to poverty and underdevelopment has been false. In Europe on the other hand, the views
are more positive, and in Asia, although there is resistance to cultural homogenization,
the opening of borders has resulted in staggering growth rates. In order to satisfy these
concerns, perhaps MNCs should seriously consider the benefits of adopting the
multidomestic strategy and forego some of the benefits of standardization.
While these two strategies would seem at odds with one another, there remains a
third possibility. This strategy, referred to as global localization benefits from the
best of both approaches. Described by Ohmae (1994) as the most advanced stage of
corporate globalization; where management of the MNC is both global and local in
orientation. Rather than develop only local responsiveness, knowledge transfer or
pursue global efficiency, Bartlett and Ghoshal, 1989, 1992) believe that all must be
practiced simultaneously. This structure would require managers to act based on a
shared perspective rather than on an organizational chart. This was referred to by
Bartlett and Ghosal (1992) as creating a matrix in the managers minds. The global
localization strategy and structure diffuses power across the MNC creating an
interdependent network of firms (Kidger, 2001).
Ultimately, the strategies put in place by the corporation will dictate the Human
Resource Management (HRM) policies and procedures that Human Resources (HR) will
put in place as well as the challenges that will be faced. This is the next challenge to be
analyzed.
Human resource challenges with globalization
As organizations enter globalization they face the decision of what strategies they will
use in the foreign host country. This decision will also help dictate what HR strategy
will be implemented. As global strategies are adopted by the firm, higher levels of
global integration of key HRM processes are needed (Brewster and Suutari, 2005). As
such, HR managers can no longer simply adapt past processes for the future and the
changes will affect everything from recruitment and team selection to performance
measurement and training. The companys subsidiary strategy and cultural and legal
differences are some of the challenges that must be considered by the global HR
department. Along the same lines as the globalization strategy, HR will need to
consider the benefits of both local and standardized policies. The four main challenges
identified during the literature review were:
(1) duality challenge;
(2) legal/cultural challenge;

(3) leaders and international teams challenge; and

(4) performance challenge
For the purpose of this paper, the authors will focus on performance appraisals and the
challenges that ensue.
A (brief) background on performance appraisal failures
Many researchers have published articles on the pitfalls and the failures of
performance appraisals including Schweiger and Sumners (1994), Longenecker (1997),
Longenecker and Fink (1998), Rees and Porter (2003), Piggot-Irvine (2003) and Rees and
Porter (2004). All of these researchers have identified different results as to why
performance appraisals fail. Psychometric errors are one of the main reasons why
performance appraisals are done ineffectively within corporations. These errors,
leniency, halo effect, restriction of range, recency and contrast, are attributed to the
psychological predisposition of the appraiser during the appraisal process.
Some researchers have suggested that one possible way to minimize psychometric
errors is by using a multi-rater system of evaluation (Appelbaum et al.,2008; Edwards
and Sproull, 1988; Rees and Power, 2003). A self-performance appraisal is another
method that can support the multi-rater system to reduce the presence of psychometric
errors. As compared to the multi-rater system, very little research has been carried out
related to the self-assessment appraisal method. However, most studies that were done
on self-evaluation indicated positive results relating to the appraisal process. Farth et al.
(1991) state that self-evaluations can increase the effectiveness of the appraisal system
and result in a positive impact on an employees satisfaction with the evaluation and
his/her perception of justice and fairness. Similar results were found by Jackson et al.
(2003). Employees who had a chance to rate themselves became more involved and
committed to his/her personal goals.
Elements to improve performance appraisals
Piggot-Irvine (2003) conducted three studies from 1996 to 2001 on the topic of
performance appraisals. Based on the findings, the author mapped out (Figure 1) all of
the essential elements required to perform an effective performance appraisal.
Training is a crucial factor to conducting effective performance appraisals.
Companies must train their managers on how to conduct performance appraisals and
managers must know how to set proper goals and objectives at the beginning of the
calendar or evaluation year. There is a general consensus among researchers on the
topic that companies must give some sort of training to their managers on how to give
proper appraisals to employees. Managers must receive training in supervision skills,
coaching and counseling, conflict resolution, setting performance standards, linking
the system to pay and providing employee feedback.
In addition, the appraiser must receive periodic re-training in order to maintain their
performance assessment skills. The rater should also be evaluated each year on how
they conduct performance appraisals with their employees (Boice and Kleiner, 1997).
According to the (Piggot-Irvine, 2003) model the most important elements to
conducting an effective performance appraisal are respect, openness and trust. These
key features must not only be present during the appraisal but they must be practiced
between managers and subordinates throughout the year. One way to develop this

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Figure 1.
Elements of appraisal
effectiveness

relationship is for managers to give feedback to their employees on a frequent and

ongoing basis.
In the first section of this article the different aspects of globalization and their
associated challenges were covered while the second part provided an overview of the
performance appraisal process. In the next sections the authors will attempt to
synthesize both topics in a global context while providing a brief review of the
literature. The discussion will identify some of the main challenges companies are
facing today and provide a real-life comparison of two major companies in the life
sciences industry with the findings relevant on conducting performance appraisals on
a global scale.
Performance appraisals in global corporations
The trend towards globalization has created many challenges for Human Resource
Management (HRM) and much of it focuses upon performance appraisals.
International performance appraisal is a topic that attracts considerable interest
from practitioners and academics, but most of the research on this subject has
concentrated on expatriate performance appraisals. To date, not many articles have
been published on MNCs and international performance appraisal. The review of
literature suggests that conducting international performance appraisals is very
challenging given that a performance appraisal done in a local context can already be a
complex process. When performing in a different country, variables such as language
barriers, different values, and different cultures come into play, and make the task
more complicated (Brewster, 1988). The main reason cited was the difficulty for

managers to know exactly what their employees accomplished each day at work, due
to the geographic distance (Shen, 2004).
Shen (2004) looked at the differences between Chinese and Western performance
appraisals. The key differences were:
.
Chinese performance appraisals are usually less transparent than Western
appraisals;
.
Chinese performance appraisals are usually limited in feedback and communication;
.
Chinese companies do not provide training in order to improve appraisers skills;
.
Chinese appraisees cannot change his/her results in the appraisal document; and
.
Chinese appraisers will not communicate negative feedback to appraisees.
Shen mentioned that all the managers that he interviewed from the Chinese
multinational companies commented on the fact that the Chinese performance
appraisal needs to be improved. They believe the appraisers should be able to
communicate on a regular basis with the appraisees and they should also be able to
inform the appraisees on their weaknesses so that they can improve (Shen, 2004).
One possible solution to correct these differences is for the Chinese multinational
companies to adopt Western-style performance appraisals in order to measure
managers and employees performance. However, Hempel argued that Western-style
performance appraisal might not be the answer (Hempel, 2001).
According to the literature it seems there is a universal consensus on the
importance of international performance appraisals but there is a lack of agreement
on what are the best practices to conduct them at the global level. Brewster (1988)
argues that the performance appraisal at the international level is extremely
complex because there is no correct way to assess the performance of someone who
is located a distance from the appraiser. Long distance assessment can be quite
challenging and complications may arise due to differences in culture and society. In
addition, the appraiser cannot evaluate the appraisees body language, which makes
it more difficult. There are other factors that make an international performance
appraisal extremely complex, such as different norms and policies, different legal
systems and different economic environments. This article will focus on the
challenges of conducting performance appraisals at the global level due to cultural
differences and geographic distance.
Challenges of conducting performance appraisals in global corporations
Conducting performance appraisals is an extremely complex process despite all the tools
in place. As previously mentioned; there are many variables that can interfere with the
process and; as a result; the performance appraisal would be perceived as ineffective and
unfair particularly when this process is performed at an international level. This article
focuses on three major challenges when conducting global performance appraisals:
(1) individualist and collectivist cultures;
(2) cultural differences and their relationship to leniency psychometric error; and
(3) trust and open relationships.
These were generally described earlier in the article.

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Individualist and collectivist cultures

Globalization has become a major trend for many companies and as such, studies were
done at an international level allowing researchers to make cross-cultural comparisons.
Bailey et al. (1997) analyzed employees performance in individualist and collectivist
cultures. The results demonstrated that employees of an individualistic culture tend to
rate their performance more favorably as compared to collectivist culture. An
individualistic culture is a culture in which the members primary focus is that of
themselves and their immediate families (e.g. US and UK are considered as individualist
cultures). In contrast, a collectivist culture is one in which people tend to view themselves
as members of groups (families, work units), and usually consider the needs of the group
to be more important than the needs of individuals (e.g. China and Japan). There are
some additional studies that correlate with the results found by Bailey et al. (1997)
Furnham and Stringfield (1998) and Stoker and Van der Heijden (2001) found that
employees from Western countries have a tendency to rate their performance higher than
their supervisors do. Cheng and Kalleberg (1996) analyzed two individualist countries
(USA and UK). They found that US employees were more likely to report that the quality
and quantity of their work was higher than those of their British counterparts.
It is a known fact as the literature supports that there is a gap between the
evaluations of the rater and the ratee, but this gap exists for different reasons
depending on the culture. The next section will look at one specific culture to explain
why this performance evaluation gap exits between supervisors and employees. This
gap is caused by the leniency psychometric error.
Cultural differences and the leniency psychometric error
Leniency errors occur when a manager tends to be more lenient than his or her peers
when rating employees or is more lenient towards one employee when compared to
another. As a result employee ratings are inflated and do not reflect the reality of
employee performance for the year.
A considerable number of studies were devoted to the leniency error in Western
cultures and, as previously stated, these researchers are in agreement that self-ratings
are significantly higher than the corresponding supervisors ratings (Bailey et al., 1997;
Stoker and Van der Heijden, 2001). The authors of this article described a study that
was conducted in the United Arab Emirates (UAE) and noticed that the gap between
the rater and ratee is still present for more or less the same reason as Western
countries. Mohyeldin and Suliman (2002) suggested that UAE employees tend to rate
their performance evaluation higher than their supervisors. The Arabic culture is
considered to be an individualist culture and therefore their rewards are linked to high
individual performance (behavior similar to Western countries). However, Arabic
countries still have certain old-fashioned historic practices. For instance, when an
Arabic employee is punished he/she will never know or be informed of the reasons for
the punishment. This type of behavior is contradictory to the notion of fairness, justice
and ethics management. Arabic culture is very similar to Asian culture at that level in
that they are not transparent when conducting performance appraisals.
Mohyeldin and Suliman (2002) also indicated that a married person would always
get a better performance appraisal as compared to a non-married person in Arabic
culture. Married employees do not want to lose their jobs or status within the company,
as this would be considered a disgrace to them and their family. Supervisors are
therefore inclined to overestimate a married employees performance, in order to avoid

his/her complaints and confrontations. Furthermore, married supervisors want to

avoid any issues coming from their employees, as they too do not want to lose their
jobs or status within the company.
Mohyeldin and Suliman (2002) suggested that it is time now for all the organizations
that are operating in the United Arab Emirates to transfer from a secret performance
appraisal to an open appraisal. When employees openly discuss their performance
results with their supervisors, the perception gap will be reduced. Reducing the gap
between the appraiser and appraisee will improve the communication, trust and
relationship between them. We now consider how building trust and an open
relationship may be challenging in the global environment.
Trust and open relationships
Developing trust and open relationships between supervisors and employees is
fundamental to achieving an effective performance appraisal. Normally, this process is
easily achieved when both manager and employee are working locally. The daily
face-to-face interaction makes it easy for the supervisor to provide informal feedback
on how well the employee is performing at work. This mitigates any surprises at the
year-end performance appraisal. However, developing trust and open relationships
could be quite challenging when supervisors and employees are working in different
countries. Different cultures and background can slow down the development of trust
and open relationships between managers and subordinates. For instance, Chinese and
Japanese employees will not trust anyone immediately. It may take years before you
earn their trust, and be able to have an open relationship. However, once this has been
achieved, they will be very loyal and it will take much to destroy that trust and the
relationship. On the other hand, North Americans will trust and develop relationships
much faster than Asians. Other factors such as time zone differences, language
barriers, gender and social status can interfere with the development of trust and the
relationship process between supervisor and employee. These factors and challenges
can widen the gap between the rater and the ratee and in the end the performance
appraisal could be perceived as unfair (Piggot-Irvine, 2003). We can now compare the
complexity of performance appraisals as found in the literature with actual situations
obtained from two organizations in the life sciences industry.
Applications in practice
In order to compare the information obtained through the review of literature, the
authors conducted a small research study with two international companies operating
in the health care industry: MDS Pharma Services and Pfizer. The survey consisted of a
six-question questionnaire and was sent to several managers meeting the criteria of
having distant employees. The sample was small due to the limited number of
managers responsible for distant employees. The questions were open ended in order
to allow for a variety of responses. A face-to-face interview was also conducted with
the Vice President of Human Resources of Pfizer Global Pharmaceuticals located in the
UK. Seven MDS managers were also interviewed, and two managers declined.
The following terms used in the questionnaire are defined as follows. The term
distant employee is where a manager and his employee are separated by a significant
distance normally another country and another time zone. This separation often
makes it difficult to communicate with or see the employee on a regular basis. Also the

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term multi-rater performance appraisal refers to an employee being rated by more

than one source. Typically, this will be their direct manager, as well as other managers,
for whom they may have provided services throughout the year. The questionnaire
asked the following, with the modest results to follow:
.
What approach do you use to make a fair performance appraisal of your distant
employees (e.g. standard appraisal, self- appraisal, 360 degree, multi-rater appraisal)?
.
Are performance appraisals performed face-to-face with distant employees? Is
this budgeted?
.
Which performance appraisal system do you believe would be the most
appropriate for distant employees (e.g. standard appraisal, self-appraisal, 360
degree, multi-rater appraisal)?
.
How do you build the trust and open relationship required with a distant
employee to give a performance appraisal that will be considered justified and
appropriate by the employee (e.g. Asia historically requires years of
relationship-building to trust someone. This may not be present, i.e. manager
is in UK and employee in Japan)?
.
How do cultural differences affect the way performance appraisals are received
by distant employees (Westerners typically rate themselves higher on an
individual basis than Asian people. This is because the Western mindset is to
work individually where as Asians work collectively)?
.
What other difficulties do you see when conducting performance appraisals for
distant employees?
Approach for fair performance appraisals
The first question asked managers what type of performance appraisal they used with
their distant employees (i.e. standard, self-appraisal, 360 degree, multi-rater). In all
cases, managers stated that they used some form of a multi-rater system whether
formal or informal. In most circumstances the feedback from outside stakeholders was
obtained via e-mail or phone conversations. Another method, said to be used, by one
manager, was self-appraisal. This would seem to be in line with the best practices
obtained through the review of literature and the use of performance appraisals know
today basically as modern methods (Schweiger and Sumners, 1994; Appelbaum et al.,
2008). The interview with Pfizers VP of HR revealed that Pfizer has implemented a
common understanding of the rating among leaders as well as a calibration process
that is used to ensure fairness across teams and team members. Furthermore, both
firms use Specific, Measurable, Achievable, Realistic and Time bound (SMART)
objectives, a form of management by objectives, that are set at the beginning of the
appraisal year, and evaluate personnel on these objectives, accordingly.
Face -to-face appraisals
One issue that continually appeared in the literature was the need for a relationship
and trust between appraiser and appraisee. Managers tended to agree with this and felt
that a face-to-face appraisal was extremely important. However, in situations such as
the economic turmoil that many industries are facing today, the availability of a travel
budget for the purpose of performance appraisals is rare. As such, many managers are
modifying their travel schedules in an effort to ensure they are able to be at a particular

location when performance appraisals are due. This is usually acceptable for the
annual review, but is far less likely to be accepted for the quarterly or midyear reviews.
Since face-to-face encounters are not always possible, the appraisal should become a
process more than a dialog as stated by the Pfizer VP of HR. This was also viewed, by
many authors, as the type of information that must be spread to managers and
employees. This understanding will help to cement the fact that even the weekly phone
calls can and should be used to provide feedback on an ongoing basis.
Appropriate performance appraisal system
Brewster (1988) argues that the performance appraisal at the international level is
extremely complex because there is no correct way to assess the performance of
someone that is located a distance from the appraiser. The difficulty for managers to
know exactly what their employees accomplished each day at work due to the
geographic distance (Shen, 2004) was echoed by one manager that wrote Im not on
site to witness my teams performance. As such, all managers felt that a multi-rater
system would be of greatest value. Some managers felt that a combination of
multi-rater and self-appraisal could provide even more information however they
believed this to be labor intensive. One comment that was found to be interesting by
the authors in the literature was that distant employees are considered trusted
employees without the need for direct supervision. This suggests that these employees
were actively sought out as potential candidates and developed to operate in the global
environment. A final comment on this subject was that caution must be taken when
doing international performance appraisals across cultures. It was mentioned that
although appraisal methods such as the 360 degree was of great value, some
cultures, such as a collectivist culture, are not accepting of these methods.
Trust and relationships
Managers felt that the first year and hence the first impression that they had on their
distant team members was critical. They believed that the first meeting had to be
face-to-face and the standards and expectations had to be designed up front. While
setting expectations the managers could also state what they were promising to do for
the employees, however the managers had to ensure that they delivered on these
promises. This built the foundation of trust upon which a relationship could be
constructed. Interaction, communication and regular feedback were also cited as
requirements as well continuous fairness amongst team members to continue the trust
building. Furthermore, employees need to feel that the manager is accessible,
regardless of the distance that separates them. For this reason, face-to-face meetings
should occur throughout the year. However, there must be formal and informal
interactions between the manager and his/her team at least once a week; either
virtually, by phone or in person. Another comment related to the need for the manager
to find out what made each employee tick. They would work to find what each
employee valued (title, work, money, etc.) and help the employee to satisfy those
particular needs thereby building the trust and relationship with the employee. Factors
such as time zone differences, language barriers, gender and social status, can interfere
with the development of trust and open relationships between the supervisor and
employee. These factors can widen the gap between the rater and the ratee, and in the
end, the performance appraisal could be perceived as unfair (Piggot-Irvine, 2003). It

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would seem that most managers have developed some tactics with which to avoid
these problems, even though formal processes may not be in place.
Different cultures receive/perceive performance appraisal differently
The Pfizer VP of HR spoke of how different cultures may have a different understanding
of ratings. Therefore Pfizer, starting with its leaders, is developing a common
understanding of ratings so as to ensure that an excellent translated quantitative rating
will have the same meaning across different countries. MNCs will need to balance the
need to standardize HR best practices across borders with the need to integrate local
policies and customs (Poutsma et al., 2006), but with standardization resources must be in
place to ensure a common understanding of the standards. Managers cited the need to
clearly communicate what rating system was being used and what behaviours translated
into what rating. There was also a consensus that managers need to familiarize them with
the culture they were dealing with and to use the approach that was appropriate for that
culture. This awareness of culture can also help managers accept the way a distant
employee may react to the performance appraisal. For example, one manager spoke about
his employees in France being very protocol driven. As such, if they were to disagree with
the rating, they would go to the HR department with their concerns rather than
discussing it one on one with the manager. The manager stated that he viewed this action
differently than if it were to happen with his North American employees. This suggests
that cultural training is important for managers with employees in different countries and
the organization should take this into consideration during globalization. Much of this
development can be achieved through the use of international teams where managers can
gain international experience and learn cross-cultural interaction (Brewster and Suutari,
2005). Working in a team environment, leaders must be able synthesize diverse cultural
needs and perspectives of all team members (Odenwald, 1996) thereby preparing them for
a future role in global management.
Other difficulties encountered
The final question was used to elicit difficulties and concerns that may not have been
found in the literature. Below are some points taken from the responses:
.
I am used to walking around to read non-verbal cues of my people and I have
lost that.
.
Time zone differences force communication to largely be based on email and
phone messages. This makes it difficult to ensure that messages are received and
understood.
.
Performance appraisals are very personal and if you cannot be there in person,
it can magnify the sense of distance.
.
Distant employees may have a sense of separation and loneliness and adds the
challenge of ensuring the employee feels included in the team or department.
.
Not knowing the individual enough and not spending enough time to get to
know the employee.
.
Not supplying sufficient development for a distant employee.
.
Error in rating without a formal multi-rater process in place. Stakeholder
feedback was received too late.

The last point was explained through the description of an incident the manager
encountered. He felt that an employee had a very good year and had performed quite
well. He felt that some aspects merited an exceeds expectations rating, but not in all
areas. The overall rating the employee was finally given was exceeds expectations.
One month after the appraisal, the manager visited the site to establish goals for the
coming year. At that time the manager received stakeholder feedback that would have
resulted in the employee getting a meets expectations had the information been
received prior to the evaluation. Distance can confuse and distort positive intentions in
a most interesting manner.
Overall, there appears to be a correlation between the review of literature and the
responses obtained from the two firms even considering the limited responses and
interviewees. Although formal processes and procedures were not necessarily in place,
all managers had a sense of what was required in order to meet the needs of their
distant employees. A summary of conclusions and some recommendations will follow.
Conclusions
The trend towards globalization has increased in the last decade and as borders
continue to open and the world continues to get smaller through communication and
ease of transportation, it is likely to continue for the coming years. This realization
requires MNCs to adopt strategies and structures that can operate across multi-cultural
environments in order to optimize efficiencies while accounting for local policies and
practices. The final strategy that is adopted by the organization will inevitably
influence the HR strategies that are put into practice and the challenges that are
associated with those practices. This duality in the organization will present
managers with new difficulties in the management of employees and the organization
should attempt to identify potential leaders and develop their skills through training
and the use of multi-cultural teams as an opportunity and challenge rather than as a
problem in need of some nebulous solution.
Theoretically, performance appraisals are a form of providing feedback, deciding
promotions or termination, determining compensation, identifying strength and
weakness or areas for change and identifying development needs that can help with
career planning. It is a tool that both the appraiser and the appraisee can use to
enhance performance of employee and the organization. However, the type of appraisal
used must be in line and congruent with the requirements and structure of the
organization in order to reap the benefits. Training must also be provided in order to
limit many of the common rating errors that are experienced with all appraisal systems
in order to ensure that the performance appraisals are effective and the consequences
of ineffective performance appraisals is avoided. Once the performance appraisal is
expanded to the global setting the challenges are enhanced.
Performance appraisals in a globalized environment, increase the challenges that the
manager will experience, and myriad issues to be solved. The manager must now
consider the cultural and legal differences that the foreign subsidiary, and hence distant
employees are accustomed to. They must ensure that the rating system has a common
understanding across the different cultures they manage and they must be aware of how
each culture may react to the appraisal and have respect and understanding of the
reaction. However, the most difficult and yet extremely important aspect of effective
performance appraisals is the trust and relationship between appraiser and the appraisee

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and in a globalized setting, this becomes even more challenging. Managers must work to
build the relationship through regular contact and if possible regular face-to-face contact.
The contact allows the manager to provide feedback to the employee and allows for
formal and informal communication, that is usually achieved in the local environment,
with daily interactions. Failing the ability for face-to-face contact, the manager is
required to learn to leverage the technologies available today such as video-conferencing.
This can enhance the communication by allowing the manager to view the body
language of the employee without having to physically travel to the location.
Finally, with the use of a questionnaire, the authors were able to compare/contrast the
literature to actual organizational situations in the modest research situation described.
Responses from managers supported the literature quite closely in the difficulties in
dealing with distant employees. It was apparent that the managers were aware of the
importance of communication and multi-rater appraisals even though formal processes
were not necessarily in place. The managers also identified other difficulties such as the
distant employees feeling a sense of loneliness or separation. They also believed that if
appraisals were not done in person, the sense of distance could be magnified.
The authors believe that the multi-rater method of performance appraisals will
provide the MNC and its managers with the most reliable and consistent metrics on
employee performance. However, training on how to perform performance appraisals
is of utmost importance, as it will enhance the effectiveness. Furthermore, managers of
distant employees must be trained and developed in the cultural and legal differences
across countries. Organization must actively seek out potential candidates and develop
them to operate in the global environment through the use of international teams where
managers can gain international experience and learn cross-cultural interaction skills.
Finally, organizations must help the manager to learn how to build the trust and
relationship needed to be effective with his/her employees through travel, phone
contact, and possibly virtual means to ensure the effectiveness and success of the
globalization of performance appraisals.
Recommendations
The challenges involved in the performance appraisal process are present even in a
traditional national environment. Rating an employee, unless it exceeds his/her
expectations, can be a very difficult task for a manager and is only amplified when put
into a global setting. Managers must be given the unique tools needed to perform the
appraisal for a distant employee in order for it to be effective. This article has
attempted to identify these interventions.
The authors of this article believe that the recommended appraisal methods in a
global environment are 360 degree or multi-rater. This method allows the manager to
receive feedback on his/her employees performance from the people or business unit
for whom the employee performed services. The system should also include a
standardized measurement scale and the scale must have a common understanding
across the organization in order to provide for reliable and consistent metrics. Choosing
the proper performance appraisal method and rating system must then be followed
with training for the appraiser and the appraisee on effective performance appraisals,
and specifically for the appraiser in the following areas:
.
supervision skills;
.
coaching and counseling;

.
.
.
.
.

conflict resolution;
setting performance standards;
linking the system to pay;
providing employee feedback; and
cultural differences.

In addition, to maintain their performance assessment skills, the appraiser must

continue to receive periodic training. The use of training will help to reduce and
possibly eliminate the common rating errors that are experienced with even traditional
performance appraisals.
In order to address the cultural and legal differences that exist from country to
country, a manager must be prepared for the task. The manager must be able to
recognize and respect the cultural differences and approach the employees appraisal in
a manner appropriate with that culture. Research suggests that training is imperative
and leaders should be developed through the use of global teams. This experience on
global teams allows the managers to experience the different cultures preferences and
it provides a forum for the manager to build self-awareness of his/her own cultural
preferences and values. The authors also believe that when given a new position, a
manager should receive training specific to the culture(s) he/she will be managing (ex:
if employees are Chinese and German and the supervisor is located in Canada then she
must receive training in the Chinese and German cultures).
The issue of building trust and a relationship with a distant employee is difficult for a
manager. The manager must make regular contact with the employee in order to help
build the trust, but he/she must also be aware of what is needed to build trust in that
culture. The manager needs to call/contact the employee weekly in order to provide
feedback, and to simulate the casual interact, that would be obtained if the employee were
local. The lack of face-to-face meetings where body language can be assessed and moods
can be determined can inhibit the interactions that are generally used to build a connection.
Ideally, the authors believe that organizations should budget for visits by managers to
distant employees on a regular basis. Not only would this help to build a relationship, but it
also allows the manager to speak with local stakeholders and assess the employees
performance on an ongoing basis. Furthermore, with the technologies available today,
managers should learn to leverage its use. For example, many organizations cannot budget
travel due to their economic situation. As such, a manager should consider the use of
applications like video conferencing. This will allow the manager to interact with the
distant employee and view the body language missed over the phone.
Finally, the authors recommend that additional empirical research be done on
performance appraisals for distant employees in a global organization. The current
literature is quite limited, requiring the researching/writing of articles such as this one to
help close the gap and/or expand the base. Additional studies should be conducted in this
area in order to prove they can reduce the performance appraisal gap at the global level.
Firms are continuing to globalize in order to reap the benefits and further research will
help these organizations to implement and maintain the appropriate performance
appraisal systems required for the optimum management of these organizations.

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Corresponding author
Steven H. Appelbaum can be contacted at: shappel@jmsb.concordia.ca

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